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Banking conglomerates caught in net
The Australian Prudential Regulation Authority (APRA) will be treating people employed by major financial services conglomerates such as AMP and the Commonwealth Bank in just the same way as union officials and employer representatives for the purposes of determining "independence".
That is the bottom line of a letter sent by APRA to superannuation funds on Friday where the regulator has added its interpretation to the definitions outlined in the Government's exposure draft legislation.
The APRA letter makes clear the regulator believes that some independent directors on "entities within a conglomerate group" would be prevented from serving as an independent director on the superannuation fund board.
In doing so, APRA said it would be supplementing the interpretations within the exposure draft legislation by setting out some of the circumstances which it considers will constitute a material relationship.
"In line with the requirements of CPS 510, APRA proposes to include material professional advisers, consultants, or suppliers as examples of material relationships," it said.
"Further, as outlined in the explanatory guide to the draft legislation, material relationships are likely to include relationships between the RSE [registered superannuation entity] licensee and standard employer sponsors, parent companies, and bodies with the right to nominate potential directors."
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